Ukraine is one of the most important producers and exporters of cereals and oilseed crops in the world and a country with abundant natural resources for fisheries and aquaculture. And yet, confronted with seasonal and unpredictable cashflows, for decades Ukrainian banks have looked on the agri-food sector as a high risk venture. This has resulted in steep interest rates and prohibitively high collateral requirements, which particularly impact small and medium-sized enterprises, effectively cutting off access to finance for long-term investments in mechanisation and technology upgrades to improve storage, processing capacity, and logistics infrastructure. In the cereals, oilseeds, and fisheries/aquaculture value chains, such modernisations are needed to meet EU technical, sanitary, and phytosanitary standards and to be competitive both in and outside the Deep and Comprehensive Free Trade Area (DCFTA) that went into force at the end of 2017.
To increase private-sector investment in the selected value chains, the European Investment Bank (EIB) and the Government of Ukraine jointly agreed the €400 million Ukraine Agri-food APEX Loan, which makes available very substantial resources for mid-caps and SME investments in an effort to increase their productivity and profitability. Ukraine will repay the loan as part of its sovereign debt.
Under a €5.5 million technical assistance grant from the EU and the UK, NIRAS and its consortium partners – AESA, TA Consult, and Unicon – were brought in to ensure timely, appropriate, and efficient distribution and use of loan funds.